Indirect costs include:
For a simple case this may only be an hour or two. For a case where the person remains on restricted duties in the long term, particularly when hours of work go up and down, supervisor time may be 50 to 100 hours. This would comprise one-on-one time with the worker, dealing with co-workers, training and supervising replacement staff, dealing with morale issues that can occur, and paperwork and administration.
|•||Human resources (HR) time|
HR activities include time spent on return to work issues, as well as day-to-day administration and payroll issues. HR staff are responsible for communication with internal staff, external providers, treaters and claims managers. On top of these responsibilities, HR staff also undertake administrative duties: completion of forms and other paperwork, calculation of wages (often messy and complex), correspondence about pay and reimbursements, resolving problems, and paying accounts such as medical treatment invoices.
|•||RTW and Health and Safety staff time|
Return to work coordinators may spend as little as one hour on a simple case, but a long term or complex case may consume weeks of a coordinator's time. The investigation of a significant injury, time spent defending fines or being involved with litigation can consume days or weeks of Health and Safety staff time.
If a case is disputed, there may be time taken for the investigation of the claim, time taken for discussion with claims staff, and time spent at conciliation. For major claims, there may be substantive time spent on court cases.
|•||Staff replacement costs |
Staff replacement costs make up a significant proportion of the indirect costs. In the short term situation a casual employee may be employed to perform the duties of the injured or ill worker. A casual employee will usually require training and will often work at lower levels of productivity while receiving a higher rate of pay. There may also be advertising and other recruitment costs.
Staff on restricted duties are paid their normal rate of pay. However their productivity can be between 5 - 95% of their normal productivity.
|•||Impact on company morale|
Discretionary effort is a significant component of productivity. Employees who feel that they are not well-treated have a lower level of discretionary effort.
|•||Impact on customer service|
For smaller organisations, the indirect costs usually make up an even larger proportion of overall costs of poor injury management. In a small business, the absence of just one employee can have a huge impact on customer service. There are fewer other staff who can step in to cover a job, and loss of customers results in long term impacts on business turnover.
A well-known chef in a small-town restaurant sustains a back problem. Because of the way the situation is dealt with the chef remains off work for many months. Customers of the restaurant learn about what has happened and realise that the chef is not returning. Customers go elsewhere and the restaurant’s revenue is significantly diminished.
|•||Company reputation |
An organisation’s reputation is built up over time. Poor performance in return to work damages a company’s reputation. This impacts on how others deal with the employer: for example doctors, claims managers, the dispute resolution system, and courts. Poor injury management damages an organisation’s internal reputation, as well as amongst the broader community.
Estimating Daily Indirect Costs:
A simple estimate of the daily indirect costs of someone off work is twice their daily wage